Monday, Mar. 08, 1948
Amber Light
The used car trade, a boomtown bonanza since 1945, was settling back into being just a business. And for the moment, at least, business was not very good. Since the first of the year, used car prices have fallen between 10 and 20%. Last week, even with lower prices, most used car lots were jammed with bright, shiny secondhand jobs, and sales were pretty much at a standstill.
What sales there were did little to cheer the salesmen. Except for "used" new Cadillacs, which still command handsome ($1,100) premiums after they have been driven around the block a time or two, secondhand luxury cars were on a cutrate basis.
Cash-Paying Dealers. The squeeze was also on in medium-and low-priced models. On Detroit's Livernois Avenue, used car center of the U.S., almost all makes of '47 cars were tagged at less than their original price.* In depressing contrast, Kaisers and Frazers (see below) were down $1,000 from list, Oldsmobiles were down $200 below list price, and even Fords, Pontiacs and Plymouths were selling slightly below list.
For '48 models, premiums were still the rule. But for Fords, the premium was down to a $125-$300 range, as compared with $300-$700 six months ago. For Chevrolets and Pontiacs, it was down from $500 to $300. What bothered dealers most was that they had paid too much to get the cars. Said one overloaded Livernois dealer: "Somebody's going to take one hell of a licking on this street. It looks like there's going to be more finance people operating the used car business than there are models on the lots." Cashless Customers. What caused the drop? Northern dealers blamed bad winter weather and increased new car production.
In Miami, where the weather was fine, the lag in tourist business was blamed. An other reason was that the tumble in grain prices had knocked many a farmer out of the market. All over, customers were running out of money and could not afford the still sky-high prices.
Many dealers expected things to pick up (though not to last fall's peak) with spring weather. National Used Car Mar ket Reports, Inc. said: "The light is amber, not red." But if overall business slumps in the latter half of this year, it warned, the light will certainly turn red.
* Two exceptions: Chevrolets at $200 more, and Buicks at $50-$100 more.
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